Utility Expectation 

Utility Expectation is the value placed on a future state as the result of a human decision. In Behavioral Economics, it is the anticipated “worth” of the result of a transaction of goods or services. The extent to which this expectation is fulfilled is the basis of brand preference, brand loyalty and brand switching. 

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For Example


Buyers make decisions about which product or service to purchase based on multiple factors, both economic and psychological. In our models, these factors may include the product’s price, the “feeling” of ownership and the perception of the product’s performance. Behavioral economics creates a context in which each of these factors have relative degrees of impact on expected utility and the decision which follows.

Imagine going to your usual morning coffee shop, the one at which you grab a cup on the way to work, and finding a newly opened coffee shop next door. You decide to try the new spot and are pleasantly surprised by the barista’s greeting and the incredible cappuccino. The next morning, do you return to your usual coffee shop, or the new one you just tried? 

Not everyone will make the same choice since different factors play different roles to different decision makers. However, it is possible to predict their choices based on consumers’ own experiences and the decision heuristics they employ. In this way, behavioral economics guides marketers by surfacing their expectations of utility and loyalty.